Nathan Sproul’s Money Trail Leads to California Republican Party

By Pam Martens: October 19, 2012 

A Sacramento law firm that touts its sophistication in campaign finance matters has been linked to companies secretly operated by Nathan Sproul to register voters.  Sproul’s operation is under investigation in Florida and by members of Congress for voter registration fraud, including registering dead people, forging signatures, falsifying addresses, and changing party affiliations.  Yesterday, a former employee was arrested in Virginia for tossing completed voter registrations into a dumpster, as reported by Joseph Tanfani at the Los Angeles Times. 

Charles H. Bell, Jr. and Thomas W. Hiltachk, founded the law firm now known as Bell, McAndrews & Hiltachk in 1991.  It bills itself as a leader in campaign finance and regularly brings election law matters before the Federal Election Commission and Appellate Courts. 

Bell is currently General Counsel to the California Republican Party, serving in that position since 1999.  He also held that position from 1982 to 1993. 

While Bell served in that capacity, the California Republican Party has paid at least $1.2 million since 2008 to Grassroots Outreach, LLC, a limited liability company registered with the California Secretary of State by a subsidiary of a foreign corporation, Wolters Kluwer of Amsterdam, which has operations in 35 foreign countries.  By using an outside agent to register the firm, Sproul’s ties to the company were shielded from public scrutiny.  Sproul has now confirmed to Brad Friedman of the Brad Blog that Grassroots Outreach is his operation.  

Recently, Sproul has stated that the Republican National Committee (RNC) asked him to set up a company not linked to him for 2012 voter registration drives, ostensibly because of rampant past allegations of voter registration fraud by people he employed.  Sproul was never charged in those matters but was investigated in multiple states. 

The Los Angeles Times summed up the ruse this way: “…his reputation is such that when Sproul was tapped by the RNC to do field work this year, officials requested that he set up a new firm to avoid being publicly linked to the past allegations.” That firm, Strategic Allied Consulting, is the one currently under investigation, but the California front firm, Grassroots Outreach LLC, has been operating in California since at least 2008. Lee Fang, writing for The Nation, tracked the address of Grassroots Outreach to Sproul’s office address in Tempe, Arizona. 

By using CT Corporation, the subsidiary of the foreign firm, Wolters Kluwer, as the agent to register multiple Sproul firms with the various Secretary of State offices, and using the agent’s office address instead of Sproul’s, none of the ties to Sproul would have emerged.  But Greg Flynn of BlueNC became curious and checked the web site registration of Strategic Allied Consulting and got a screen shot of it linking it to Sproul, just before it was changed to a private registration. 

In addition to serving as General Counsel to the California Republican Party, Bell also serves as Treasurer to a group called Golden State Voter Registration Project.  That group has funneled $1.6 million to Grassroots Outreach LLC between 2009 and 2011, with the bulk of that coming in 2010.  The largest donor to Golden State Voter Registration Project is the reclusive Jerry Perenchio, who made a $1.5 million donation in 2010 according to the Center for Responsive Politics. 

According to the Sunlight Foundation, Perenchio and his wife, Margaret, have donated at least $2 million to the Karl Rove related American Crossroads super PAC and more than $50 million into political activities stretching back decades, primarily to conservative candidates and causes. 

Inexplicably, the Golden State Voter Registration Project terminated its filings with the Federal Election Commission in 2009, despite continuing to accept contributions and make expenditures.  A call to the FEC did not adequately clarify why the group was able to stop making filings.

Bell’s law partner, Thomas Hiltachk, is listed on 2009 filings with the FEC as Assistant Treasurer of Golden State Voter Registration Project.  According to investigative reporter, Matthew Fleischer, “Hiltachk is the author of Proposition 32, which promises to rid Sacramento of special interest money – but which would actually give almost complete control of state politics to corporations and the super-rich by effectively crippling the ability of unions to participate in elections and lobbying.” 

Fleischer maps out an unholy alliance with Hiltachk, calling him “an old hand at drafting legislation benefiting Big Tobacco or beating back living wage campaigns.”  Fleischer notes also: 

“In 2003, Hiltachk penned the initiative to recall then-California Governor Gray Davis. He later served as the spokesman and legal counsel for Rescue California—the committee that spent $3.6 million lobbying and signature-gathering for the initiative.

“When Davis lost his recall election to Arnold Schwarzenegger, Hiltachk had little trouble finding his next job—as legal counsel to the new governor.

“Working for the Schwarzenegger state house, however, didn’t stop his own efforts to push California’s political agenda as far right as possible. In 2006, Hiltachk and his firm authored and pushed for the Fair Pay Workplace Flexibility Act—a progressive-sounding bit of legislation that would have increased California’s minimum wage by a pittance.

“Hovering just above that carrot, however, was a giant stick. The bill would have eliminated overtime pay for many workers and frozen all future minimum wage raises without the consent of two-thirds of both houses of the California legislature—a nearly impossible feat.” 

I gave Bell the opportunity to clarify each of the concerns raised in this article, calling his office and sending the following emailed questions.  There has been no response.  Should Bell decide to shed some transparency on these matters, we will add an immediate update. 

(1) Were you aware that large sums of money were being funneled through Golden State Voter Registration Project, of which you serve as Treasurer, to a Nathan Sproul operation, Grassroots Outreach LLC. 

(2) Did the California Republican Party, of which you serve as General Counsel, know that Grassroots Outreach LLC was operated by Nathan Sproul when it paid the firm large sums of money. 

(3) What were the specific jobs that Golden State Voter Registration Project and the California Republican Party wanted Grassroots Outreach LLC to do? 

(4) Is Grassroots Outreach LLC still working on behalf of either the California Republican Party and/or Golden State Voter Registration Project? 

(5) I note that Golden State has terminated its filings with the FEC. Could you explain why it is no longer required to make those filings. 

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